Performance Report – 2010 - Ministry of Finance and Planning

The Department of National Planning hasactively participated by providinginformation and policy direction toprepare a draft of the National WaterResource Policy.The officers in the Department ofNational Planning attended the Steeringcommittee meeting of theMoragahakanda & Kaluganga ReservoirsDevelopment Project and Dam Safety andWater Resources Management Projectand the project committee meeting of theUma Oya Multipurpose DevelopmentProject. In addition, officers haveparticipated in progress review meetingsand Policy review meetings.Plantation SectorThe plantation sector plays a vital role in thecountry’s economy by contributing 3.4percent to the GDP while providinglivelihood and foreign exchange earnings. Itprovides employment to about 1.5 millionpersons and contributes 23 percent toagricultural production, while about 20percent of export earnings are generated bythe plantation sector. The sector consists ofthree major crops cultivations: tea, rubberand coconut, which are grown in 12 percentof the country's land area as well as spicesand other supplementary plantation cropssuch as sugar, cashew, and palmyrah.Since the strategy remains producingexcellent tea at competitive prices, in 2010highest prices compared to all otherinternational tea auctions was recorded by theColombo Tea Auction due to increaseddemand for Sri Lankan origin orthodox teas.The government supported the sector throughcontinuing fertilizer support schemes for teaand rubber during the year 2010. With a viewto encourage tea and rubber cultivation, thesubsidies for re-planting and new-planting fortea and rubber were also increased and it wasextended to coconut re-planting and newplantingas well. In order to uplift coconutproduction, the government has initiated theprovision of direct fertilizer (Urea andMurate of Potash) bag of 50kgs at a subsidyprice of Rs. 1,000 for coconut lands includingall home gardens based on the number ofcoconut trees available in an extent of oneacre. Export Cess on raw rubber wasincreased in order to promote the value addedexports of rubber. Specially, during the year2010, due to favorable weather conditionsand the continuation of the fertilizer subsidysupport, the tea sub sector recorded thehighest ever annual production of 329 millionKg. This is a growth of 13 percent comparedwith 2009. Rubber production also continuedto increase, although the coconut productionrecorded a considerable decline during theyear 2010.The production of almost all other exportagricultural crops has shown a positivegrowth in 2010 compared with 2009. It is dueto the favorable weather conditionsprevailing and improved world demand forspices together with the consistent increase ofthe prices. Accordingly, a phenomenalincrease in export volume by 49 percent to43,313 metric tons was reported in 2010against 29,044 metric tons exported in 2009.The production of pepper has increased by9.8 percent to 17,323 metric tons in 2010against 15,767 metric tons produced in 2009.Meanwhile, production of cloves has tripledin 2010 showing a huge increase to 9,559metric tons from 3,032 metric tons in 2009.The remarkable growth of cloves productioncannot be explained in terms of the boomharvest that comes every four years as aboom harvest was reported in 2008.Therefore, this increase is explained byfavorable weather conditions and higherprices. The productions of cinnamon, cocoaand Nutmeg (including mace) have increasedby 4.1 percent, 11.35 percent and 36.55154